UK regulator to lift ban on ‘crypto’ ETNs for retail investors

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The United Kingdom’s Financial Conduct Authority (FCA) has decided to lift the ban on retail access to digital currency exchange-traded notes (cETNs), beginning October 8, 2025.

Currently, in the U.K. only professional investors are permitted to access cETNs, a type of digital asset investment product, but in an August 1 press release, the FCA—the U.K.’s top finance sector regulator—announced that “firms will soon be able to give retail consumers access.”

ETNs are a type of bond issued by a bank that promises to pay the investors a return of a specific index minus fees. Unlike the much-talked-about spot digital currency exchange-traded funds (ETFs), ETNs do not directly hold assets.

“Since we restricted retail access to cETNs, the market has evolved, and products have become more mainstream and better understood,” said David Geale, executive director of payments and digital finance at the FCA. “In light of this, we’re providing consumers with more choice, while ensuring there are protections in place. This should mean people get the information they need to assess whether the level of risk is right for them.”

According to the FCA’s August 1 announcement, cETNs that retail consumers can access must be traded on an FCA-approved, U.K.-based investment exchange (a Recognised Investment Exchange or RIE), and financial promotion rules will apply, “so consumers get the right information and aren’t offered inappropriate incentives to invest.”

The regulator added that consumer duty, which sets standards for consumer protection across financial services, will also apply to firms offering the cETN products to retail investors. However, it reiterated that “consumers should ensure they understand the risks before deciding to invest.”

Ban and change of heart

In January 2021, the FCA banned the sale, marketing, and distribution of derivatives and ETNs that reference unregulated transferable digital assets to retail clients, citing concerns about “extreme volatility” of digital asset price, the prevalence of market abuse and the “inherent nature of the underlying assets, which means they have no reliable basis for valuation.”

The regulator back-peddled on the ban slightly in March 2024, when it announced it would not object to requests from recognized investment exchanges (such as Cboe or the London Stock Exchange) to create a U.K. listed market segment for cETNs, for professional investors only.

A year later, and in the light of international developments—chiefly the re-election of United States President Donald Trump in November 2024 and his support of the digital asset space since taking office in January—the FCA proposed lifting the ban on cETNs for retail investors, in a June 6 press release and consultation.

The regulator intended to bring the U.K. more in line with international peers and support “U.K. growth and competitiveness.”

U.S. support for the digital asset space has continued to progress in the last couple of months, with new landmark stablecoin legislation passed and other measures proposed. Thus, not wanting to be left behind, momentum in the U.K. has also swung further in the direction of encouraging the digital asset sector.

According to last week’s announcement, this change of heart from the FCA is just the latest development in its continued effort to establish a regulatory framework for digital assets in the U.K., which includes the creation of a “crypto roadmap” and recently published proposals on stablecoins and digital asset custody.

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